Oil and Gas Groups See ‘Some Common Ground’ in Biden Energy Plan
Oil and Gas Groups See ‘Some Common Ground’ in Biden Energy Plan
HOUSTON — Joseph R. Biden Jr. won over environmentalists and liberals when he announced a $2 trillion plan to promote electric vehicles, energy efficiency and other policies intended to address climate change.
But the plan released on July 14 has also earned a measure of support from an unexpected source: the oil and gas industry that is closely aligned with the Trump administration and is a big source of campaign contributions to the president.
That might seem odd considering that the plan aims for “net-zero” greenhouse gas emissions by no later than 2050, in part by discouraging the use of fossil fuels. Mr. Biden also wants to spend more on mass transit, expand solar and wind farms and build thousands of electric vehicle charging stations.
Yet, the industry was relieved by what the plan did not include, chiefly a ban on hydraulic fracturing, the approach that has turbocharged domestic production of oil and gas over the past dozen years.
“There is a lot of room in there for oil and gas,” said Matt Gallagher, president of Parsley Energy, a West Texas oil producer, about the Biden plan.
Some executives were particularly enthusiastic that Mr. Biden wanted the federal government to invest in carbon capture and sequestration, which entails preventing emissions of greenhouse gases from reaching the atmosphere and thus allowing industry to continue burning fossil fuels for decades. In a sign of his all-inclusive, eclectic approach to energy, Mr. Biden is also proposing to use advanced nuclear reactors to produce electricity.
“There is some common ground,” said Mike Sommers, president of the American Petroleum Institute, which represents the industry in Washington and is close to the Trump administration. “We appreciate the fact that they recognize that there is going to be a role for natural gas and oil in our future. We share the broad goal of reducing emissions and addressing climate change.”
Oil and gas executives noted that they had worked productively with Democratic administrations. During the Obama administration, oil companies enjoyed handsome profits even as federal regulators put in effect tougher environmental regulations.
Charif Souki, a Houston entrepreneur who pioneered the liquefied natural gas export industry, expressed enthusiasm about the Biden plan.
“At first blush, the plan is a masterpiece because he gives something to everybody,” said Mr. Souki, executive chairman of Tellurian, a gas producer that is planning a major export terminal in Louisiana. “Investment in infrastructure is great, $400 billion for research and development is phenomenal and way overdue.”
Like almost all the fossil fuel executives, however, Mr. Souki had some reservations. He described Mr. Biden’s goal of eliminating carbon emissions from the electricity sector by 2035 as “unrealistic and unachievable.” He said Mr. Biden ought to strive for “carbon neutrality,” in which emissions from power plants would be offset by planting trees and using new technologies to suck carbon out of the air.
Of course, most oil and gas executives would prefer President Trump be re-elected because he has spent the past three and a half years rolling back regulations.
Fossil fuel interests have donated seven times more to the Trump campaign than the Biden campaign through June, according to the Center for Responsive Politics, a nonprofit research group. Those numbers are skewed in part because Mr. Trump has been raising money since he took office in 2017.
The president’s most ardent supporters in the energy industry said Mr. Biden’s plan was craftily intended to appear moderate so he could compete with Mr. Trump in states that produce oil and gas.
“He wants to win Pennsylvania, so he toned down that rhetoric for obvious reasons,” said Kathleen Sgamma, president of the Western Energy Alliance in Denver.
Coal executives are downright hostile toward Mr. Biden. “Their overall motive is to do away with coal miners and coal use in this country,” said Bill Raney, president of the West Virginia Coal Association.
Yet, energy executives have complaints with the Trump administration, too. Some natural gas executives privately grouse that the president’s trade war has cost them dearly because China, the world’s biggest gas importer, has bought only three cargoes of liquefied natural gas from the United States over the past 22 months.
Other executives say Mr. Trump’s decision to withdraw from the Paris climate accord needlessly hurt the country’s image abroad. And some think that the administration’s botched handling of the coronavirus pandemic has dealt a big blow to the economy and demand for energy.
“Masks are good for the economy,” Mr. Gallagher of Parsley Energy said. “Masks need to be an economic thing, not a political thing.”
To shore up his base in oil country, Mr. Trump plans to attend a fund-raising lunch in Odessa, Texas, on Wednesday and tour an oil rig.
Stef Feldman, the Biden campaign’s policy director, said it was not surprising that some oil and gas executives were open to some of Mr. Biden’s ideas. “More and more energy companies are realizing the reality of climate change, the direction consumers are headed, the direction other businesses are headed and they are making changes as a result,” she said.
When asked about fracking, Ms. Feldman said Mr. Biden would end new leases for fracking on federal lands but that “he does not support a complete ban on fracking.”
Some executives said they were comfortable with Mr. Biden in part because the Obama administration did not block fracking and even approved drilling in Arctic waters in Alaska. They say Mr. Biden understands the importance of limiting reliance on foreign oil, and using energy exports to help allies like Japan and undercut rivals like Russia.
“The policy of a Biden administration or a Trump administration might not be so different in the sense of leveraging exports of gas and oil as a foreign policy tool,” said Charlie Riedl, executive director of the Center for Liquefied Natural Gas, an industry group.
There is also growing recognition among some in the oil and gas business that climate change is a problem that the industry has to help address.
“Everyone I know knows we have more carbon dioxide in the atmosphere than we used to and it’s common sense that it’s probably not a good thing and we have to do something about it,” said Lawrence B. Dale, chairman of Dale Operating Company, a Dallas-based company that has investments in 5,000 oil and gas wells.
Mr. Dale said he was pleased that Mr. Biden had put forward an energy plan that did not endorse the Green New Deal, a climate proposal embraced by many progressive lawmakers.
Support for Mr. Biden’s plan is clearly stronger among other parts of the energy industry, including electric utilities and renewable energy companies.
The Edison Electric Institute, which represents investor-owned utilities, said its members were generally aligned with Mr. Biden’s plan for a clean electricity grid.
Pedro J. Pizarro, president and chief executive officer of Edison International, the parent company of Southern California Edison, said the Biden plan’s emphasis on clean energy jobs, energy efficiency and transportation was smart. If anything, he said, the proposals for more electric vehicle chargers would most likely need to be increased, as emissions from cars and trucks remain a major contributor to climate change.
“While the devil is in the details, we think the plan mostly gets it right,” Mr. Pizarro said.
The Biden plan would renew the federal government’s efforts to improve energy efficiency that the Trump administration has whittled away. The proposal also calls for extending tax credits for solar and wind power, which have become increasingly competitive against natural gas. Wind and solar groups also endorse Mr. Biden’s proposals to strengthen the electricity transmission network to help their technologies.
At least some in the renewable energy business accept that the Biden plan will keep fossil fuels in the energy mix.
“I don’t want to minimize in the near term that natural gas is an important partner,” said Tom Kiernan, chief executive of the American Wind Energy Association. “What we’re seeing is all kinds of combinations.”
That oil and gas interests are OK with a potential Biden presidency might scare some liberals, said Robert Shrum, the director of the University of Southern California’s Center for the Political Future who has advised Al Gore, John Kerry and other Democrats. “There would be some people in the Democratic Party who would get upset that there are oil people who are supporting Biden, but they ought to back off,” Mr. Shrum said. “Don’t we want to win Texas?”
Clifford Krauss reported from Houston, and Ivan Penn from Los Angeles.